Philippine Lender’s Blockchain Initiative Empowers Rural Banks

[Leonardo]

Unionbank Chairman Justo Ortiz posing for a picture with Senior VP Ramon Duarte, XLOG directors Joey Ynion and Nico Gonzales at Singapore Fintech Festival.

The UnionBank of the Philippines (UBP) is pushing its i2i (island-to-island) blockchain initiative to empower rural banks to gain more extensive access to the central banking network while at the same time providing financial inclusion to the tens of millions of unbanked Filipinos.

In a presentation during the 2018 Singapore FinTech Festival, the world’s largest platform for the global fintech community held in Singapore, UBP Chairman Justo Ortiz said the initiative would also allow rural banks wider coverage and expand their services because project i2i will enable them to perform critical banking functions that are traditionally offered only by universal banks.

Through blockchain, these small lenders could provide services to mid-sized and micro, small and medium enterprises as well as other sectors, including retail shops and cooperatives, Justo added.

"One of our mandates is to promote financial inclusivity, and with blockchain, we have cracked the code on it," Ortiz said, who is also the current president of the Blockchain Association of the Philippines (BAP).

During the event, UBP represented the Philippines with its “Tech Up Pilipinas" program. UnionBank is the only lender from the Philippines who participated in the event.

UBP highlighted its variety of initiatives that drive the bank's digitization programs, including its recent partnership with global business networking platform GlobalLinker, which is focused on small and medium enterprises (SME) and business start-ups.

At the same event, UnionBank President and CEO Edwin Bautista underscored the need to innovate amid the changing business landscape to survive and remain competitive to keep up with growing customer demands.

He said, "The world is moving forward, and we already see solutions that make the whole ecosystem more efficient.”

Bautista also acknowledges the imminent possibility of disruption in the banking sector to be brought about by the rapidly evolving technology and rising customer digital expectations. He said banks are facing the risk of becoming irrelevant if they do not improve as emerging businesses and companies are coming in with their respective "digital propositions."

In May, UnionBank also rolled out its blockchain-powered system that links rural banks with its own network to achieve interconnection similar to Bancnet and SWIFT systems. Ortiz said the program was pilot-tested in six rural banks that were approved by the Banko Sentral ng Pilipinas (BSP), the country’s central bank.

The blockchain-enabled system will limit the number of steps in completing a bank transaction to three from the usual 20 procedures.

Early this year, the Philippine lender partnered with Visa to create a build a cross-border B2B payment system that will benefit SMEs, a first of its kind in the country. The platform will facilitate bank-to-bank (B2B) transactions from SMEs to recipient banks.

Source: https://cryptovest.com/news/philippine-lenders-blockchain-initiative-empowers-rural-banks/